Vertical Product Differentiation, Network Competition and Regulation of Connectivity

Diego Lanzi

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: In this paper competition between two network firms is analysed under two alternative regulatory regimes: a global connectivity regulation (GCR) and an efficient component pricing regulation (ECPRe). Whereas a GCR imposes a full quality of reciprocal interconnection, firms will choose vertical product differentiation in order to lower price competition, while under a ECPRe they will choose the maximum level of services quality and a global degradation of connectivity. Hence firms decisions about whether or not vertically differentiate products seems to be, at least partially, related to regulatory rules imposed on the market.

Date: 2001
New Economics Papers: this item is included in nep-cse, nep-mic, nep-net and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:405

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